On February 9, 2015, the Securities and Exchange Commission ("SEC") proposed a rule to enhance disclosure of company hedging policies for directors, officers and other employees. This proposal would implement Section 955 of the Dodd-Frank reform law intended to increase transparency of corporate compensation. The proposed rule would add paragraph (i) to Item 407 of Regulation S-K requiring disclosure about whether directors, officers and other employees are permitted to hedge or offset any decrease in the market value of equity securities granted as compensation or held, directly or indirectly, by them. The rule would require only disclosure and would not prohibit, or require a company to prohibit, hedging activities. The SEC believes that increasing the transparency of hedging policies will help investors better understand the alignment of their ownership interests with the interests of directors, officers and other employees.
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